Why would I pay for a flight if I could get it for free? The answer is actually quite simple, its all a matter of value. If the flight I am looking to book will cost me 80,000 miles or $600 I would rather spend the money and save the miles. A flight that cost $600 or 80,000 miles would put the value of your miles less than 1 cent a piece! Whenever I spend miles I try to get the value over 2 cents per mile, obviously the higher the value the better the deal. You also have to remember that the average rewards ticket cost between 25,000 and 40,000 miles, so spending 80,000 miles on 1 ticket is wasting a potential of 2-3 free round trip tickets.
Math equation on figuring out the value of your miles:
Cost of ticket / divided by number of required miles = value per mile
$600 / 40,000 miles = 1.5 cents per mile (CPM)
How I find the value of my miles is by first figuring out how much the flight will cost me. I search a few sites for ticket prices, Expedia.com, AlaskaAir.com and Delta.com. Living in Alaska I have fewer options to travel, usually Delta, Alaska Airlines, US Airways, United, American Airlines and Frontier are just a few of the choices.
If I flew from Anchorage (ANC) to Tampa (TPA), it would cost me 40,000 Delta SkyMiles or if I purchased the ticket it would cost me $824.10, the cheapest option I could find for a flight in June. I always try to find the lowest priced flights, but if I am going to pay to fly, then I want to make sure I fly on an airline that will give me credit for the miles I fly. I not only look to see how many miles I will gain, but also the cost of the flight. If I were to only gain 2,500 miles and the ticket cost me $600, I would rather spend my free air miles than to pay for the ticket, but if I were to gain 10,000 miles for paying $800 then the ticket price might be worth it.. this also depends on the price of the ticket in terms of miles. Normally the price of a ticket will correlate with the number of rewards miles it will cost, this can also depend on high traffic seasons, holiday’s and rising cost; such as fuel cost.
You can easily find how many miles you will gain by using this free Mileage Calculator from Webflyer.
I try to always fly on Delta so that I can maximize the number of miles I gain from one account. Its better to fly on a few good airlines than to have many different rewards accounts with many different airlines. Its also easier to save miles with Delta since my miles never expire, but if I were to build up miles with American Airlines, my miles would eventually expire if I didn’t fly with them or had account activity at least once every 18 months. Some people might disagree with me here, but the way I see it, managing so many different accounts and being forced to use American Airlines once ever 18 months would become difficult and time consuming just to keep track of all of my accounts. I am not saying don’t sign up for every airline or hotel chain, but to focus on a few that give you the most benefit. You also have to find which airlines or hotel chains you like the best and which airlines flies out of your ‘home’ airport. For me I focus on Delta, Alaska Airlines, American Airlines (British Airways account) and soon to be US Airways (for a flight to Israel later in 2012).
Now that I am focused on Delta I found this flight from Anchorage to Tampa for $824.10 or a cost of 40,000 Delta SkyMiles. By buying the ticket I would gain 10,000 miles (I receive a 25% bonus, soon to be a 50% bonus from my status with the airline), or spending 40,000 miles. Essentially I am paying for the miles at 8.2 cents each if I pay for the flight to gain 10,000 miles or I am spending my miles at a value of 2.1 cents each and losing 40,000 miles if I use the reward ticket. To fly from Anchorage to Florida for 40,000 miles is pretty cheap. I also understand that ticket prices are much less when you live in the lower 48 States, so I usually have to get creative or plan trips further in advance than if I lived back in Seattle.
I am currently trying to figure out where I could fly using American Airlines from Anchorage to take advantage of the current 50% transfer bonus from AMEX to my British Airways account, otherwise I’ll wait until Delta has a transfer bonus.. hopefully soon!